CASE DIGEST IN CIVIL LAW
REVIEW
CASES:
1. Rivera v. Chua (746 SCRA 1)
2. Villaluz v. Land Bank of the Philippines (814 SCRA 578)
3. Geromo v. La Paz Housing and Development Corporation (814
SCRA 578)
4. Pen v. Julian (778 SCRA 56)
5. Lam v. Kodak Philippines, LTD (778 SCRA 96)
6. Vitug v. Abuda (778 SCRA 609)
7. The Wellex Group, Inc. (745 SCRA 563)
v. U-Land Airlines, Co.,LTD
8. Casumpang v. Cortejo (752 SCRA 379)
SUBMITTED BY: JOHN REIÑER G. MANADAO
SUBMITTED TO: JUDGE EDMAR CASTILLO
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1. G.R. No. 184458 January 14, 2015
RODRIGO RIVERA, Petitioner,
vs.
SPOUSES SALVADOR CHUA AND VIOLETA S. CHUA, Respondents.
FACTS: Feb 1995: Rivera obtained a loan from his friends, the spouses Chua. The loan for
P120K was written in a promissory note. Rivera agreed to pay 5% monthly interest rate
from the date of default (Dec 31, 1995) until the entire obligation is fully paid. He also
agreed to pay 20% of the total amount due for attorney’s fees, in case the note was
referred to a lawyer for collection.
Oct 1998: Rivera issued a check to the spouses Chua, as payee, with an amount of P25K.
Dec 1998: spouses Chua received another check, drawn against Rivera’s account, duly
signed and dated but blank as to the payee and amount. As per understanding by the
parties, the check was issued in the amount of P133,454.00 with “cash” as payee. The 2
checks were dishonored due to “account closed.” By May 1999, Rivera owed P366K,
covering the principal and the 5% monthly interest. Due to the continued refusal to pay,
the spouses filed a case in MeTC.
In Rivera’s Answer, he claimed that (1) he did not execute the promissory note (forgery),
(2) that whenever he obtained a loan from the spouses, it was always covered by a
security, (3) there was an existing loan not yet due with the spouses, secured by a REM,
(4) the 2nd check was only issued for P1,300 not P133K, (5) there were no prior demands
for payment. MeTC ruled in favor of the spouses Chua. During trial, the spouses
presented a NBI Senior Documents Examiner, who testified that the signature in the
Promissory Note compared to other documents with Rivera’s signature were signed by
the same person.
RTC affirmed MeTC but deleted the attorney’s fees.
CA affirmed in part but reduced the interest from 60% to 12 % per annum and
reinstated the attorney’s fees.
Both parties appealed.
SC affirmed CA with respect to the reduction of the interest rate to 12% per annum.
ISSUE: Whether or not NIL should have been applied and Whether or not demand was
necessary?
RULING:
1. NO. NIL should not have been applied and demand was no longer necessary.
1. The promissory note was not a negotiable instrument following NIL Sec. 1
and 184.
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2. The PN was made out to a specific person (spouses Chua) and not to
order or to bearer or to the order of the spouses Chua as payees.
3. The Promissory Note is unequivocal about the date when the obligation
falls due (31 Dec 1995). Following Art. 1169 NCC, demand by the creditor is no longer
necessary for delay to exist, when the obligation expressly declares.
4. Due to the delay in payment, Rivera was liable to pay interest as
indemnity for damages (Art 2209, NCC). Article 2209 is specifically applicable in this
instance where:
a. the obligation is for a sum of money;
b. the debtor, Rivera, incurred in delay when he failed to pay on or before
31 December 1995; and
c. the PN provides for an indemnity for damages upon default of Rivera
which is the payment of a 5% monthly interest from the date of default.
5. SC did not consider the stipulation on payment of interest as a penal
clause although Rivera, as obligor, assumed to pay additional 5% monthly interest on
the principal amount of P120,000.00 upon default.
a. Following Art. 1226, NCC, the stipulation in the Promissory Note is
designated as payment of interest, not as a penal clause, and is simply an
indemnity for damages incurred by the Spouses Chua because Rivera
defaulted in the payment of the amount of P120,000.00. The measure of
damages for the Rivera’s delay is limited to the interest stipulated in the
Promissory Note. In apt instances, in default of stipulation, the interest is that
provided by law.
b. CA found the 5%/month or 60%/annum, on top of the legal interest
and attorney’s fees, steep, tantamount to it being illegal, iniquitous and
unconscionable.
6. However, since the issue on the reduction of interest was already
disposed by SC, res judicata should apply.
2. G.R. No. 192602 January 18, 2017
SPOUSES MAY S. VILLALUZ and JOHNNY VILLALUZ, JR.,
vs.
LAND BANK OF THE PHILIPPINES and the REGISTER OF DEEDS FOR DAVAO CITY
FACTS: Paula Agbisit, the mother of May Villaluz, requested the latter to provide her a
collateral for a loan. May and her husband Johnny agreed to allow Agbisit to use their
property in Davao as collateral for a loan. For such purpose, they executed an SPA in
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favor of Agbisit. Notably, the SPA did not expressly prohibit Agbisit from appointing a
substitute.
Agbisit later executed an SPA, appoint Milflores Cooperative as attorney-in-fact in
obtaining a loan from Land Bank. Milflores Cooperative then executed a Real Estate
Mortgage in favor of Land Bank in consideration for a loan. Milflores Cooperative was
not able to pay the loan to Land Bank. Hence, the latter foreclosed the property. Land
Bank won the auction sale of the property as the highest bidder.
The Spouses Villaluz filed a complaint for annulment of the foreclosure sale, claiming
that Agbisit could no have validly delegated her authority as attorney-in-fact to Milflores
Cooperative. The RTC, however, ruled in favor of Land Bank and held that the delegation
of Agbisit to Milflores Cooperative was valid because the SPA executed by the Spouses
Villaluz had no specific prohibition againt Agbisit appointing a substitute. The CA
affirmed the RTC’s ruling.
ISSUE: Whether or not the mortgage contract executed by the substitute (Milflores
Cooperative) is valid and binding upon the principal (Spouses Villaluz)?
RULING: Yes. The mortgage contract executed by the substitute (Milflores Cooperative)
is valid and binding upon the principal (Spouses Villaluz).
The law creates a presumption that an agent has the power to appoint a substitute. The
consequence of the presumption is that, upon valid appointment of a substitute by the
agent, there ipso jure arises an agency relationship between the principal and the
substitute. As a result, the principal is bound by the acts of the substitute as if these acts
had been performed by the principal's appointed agent. Concomitantly, the substitute
assumes an agent's obligations to act within the scope of authority, to act in accordance
with the principal's instructions, and to carry out the agency, among others. In order to
make the presumption inoperative and relieve himself from its effects, it is incumbent
upon the principal to expressly prohibit the agent from appointing a substitute.
Although the law presumes that the agent is authorized to appoint a substitute, it also
imposes an obligation upon the agent to exercise this power conscientiously. To protect
the principal, Article 1892 allocates responsibility to the agent for the acts of the
substitute when the agent was not expressly authorized by the principal to appoint a
substitute; and, if so authorized but a specific person is not designated, the agent
appoints a substitute who is notoriously incompetent or insolvent. In these instances,
the principal has a right of action against both the agent and the substitute if the latter
commits acts prejudicial to the principal.
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In this case, the SPA executed by the Spouses Villaluz contains no restrictive language
indicative of an intention to prohibit Agbisit from appointing a substitute or sub-agent
principal may furthermore bring an action against the substitute with respect to the
obligations which the latter has contracted under the substitution.
Although the law presumes that the agent is authorized to appoint a substitute, it also
imposes an obligation upon the agent to exercise this power conscientiously. To protect
the principal, Article 1892 allocates responsibility to the agent for the acts of the
substitute when the agent was not expressly authorized by the principal to appoint a
substitute; and, if so authorized but a specific person is not designated, the agent
appoints a substitute who is notoriously incompetent or insolvent. In these instances,
the principal has a right of action against both the agent and the substitute if the latter
commits acts prejudicial to the principal. In the present case, the Special Power of
Attorney executed by the Spouses Villaluz contains no restrictive language indicative of
an intention to prohibit Agbisit from appointing a substitute or sub-agent. Thus, we
agree with the findings of the CA and the RTC that Agbisit's appointment of Milflores
Cooperative was valid.
3. G.R. No. 211175 January 18, 2017
ATTY. REYES G. GEROMO, FLORENCIO BUENTIPO, JR., ERNALDO YAMBOT and LYDIA
BUSTAMANTE
vs.
LA PAZ HOUSING AND DEVELOPMENT CORPORATION and GOVERNMENT SERVICE
INSURANCE SYSTEM
FACTS: Petitioners Geromo, Buentipo, Yambot, and Bustamante acquired individual
housing units of Adelina Subdivision from La Paz, the owner/developer, through GSIS
financing. The houses were situated along an old creek. After two years of occupation,
cracks started to appear on the units. As a remedy, the developer constructed a
riprap/retaining wall along the creek. Despite the construction of the wall, the
conditions of the houses worsened, which prompted them to leave.
Later on, through the inspection of the subject properties, the DENR found that there
was “differential settlement of the area where the affected units were constructed.”
Due to this basis, Geromo file a complaint against La Paz and GSIS.
ISSUE: Whether or not petitioners are entitled to the award of damages due to the
negligence of La Paz in developing the housing units which were sold to the petitioners?
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RULING: Yes. Due to the indifference and negligence of La Paz, it should compensate the
petitioners for the damages they sustained. On actual damages, the standing rule is that
to be entitled to them, there must be pleading and proof of actual damages suffered.
Actual damages, to be recoverable, must not only be capable of proof, but must actually
be proved with a reasonable degree of certainty. Courts cannot simply rely on
speculation, conjecture or guesswork in determining the fact and amount of damages.
To justify an award of actual damages, there must be competent proof of the actual
amount of loss, credence can be given only to claims which are duly supported by
receipts.
In this regard, the petitioners failed to prove with concrete evidence the amount of the
actual damages they suffered. For this reason, the Court does not have any basis for
such an award.
Nevertheless, temperate or moderate damages may be recovered when some
pecuniary loss has been suffered but its amount cannot, from the nature of the case, be
proved with certainty. The amount thereof is usually left to the discretion of the courts
but the same should be reasonable, bearing in mind that temperate damages should be
more than nominal but less than compensatory.32 In this case, the petitioners suffered
some form of pecuniary loss due to the impairment of the structural integrity of their
dwellings. In view of the circumstances obtaining, an award of temperate damages
amounting to ₱200,000.00 is just and reasonable.
The petitioners are also entitled to moral and exemplary damages. Moral damages are
not meant to be punitive but are designed to compensate and alleviate the physical
suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar harm unjustly caused to a person.
To be entitled to such an award, the claimant must satisfactorily prove that he indeed
suffered damages and that the injury causing the same sprung from any of the cases
listed in Articles 2219 and 2220 of the Civil Code. Moreover, the damages must be
shown to be the proximate result of a wrongful act or omission. Moral damages may be
awarded when the breach of contract was attended with bad faith, or is guilty of gross
negligence amounting to bad faith. Obviously, the uncaring attitude of La Paz amounted
to bad faith. For said reason, the Court finds it proper to award moral damages in the
amount of ₱150,000.00.
Petitioners are also entitled to exemplary damages which are awarded when a wrongful
act is accompanied by bad faith or when the guilty party acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner" under Article 2232 of the Civil Code. The
indifference of La Paz in addressing the petitioners' concerns and its subsequent failure
to take remedial measures constituted bad faith.
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Considering that the award of moral and exemplary damages is proper in this case,
attorney's fees and cost of the suit may also be recovered as provided under Article
2208 of the Civil Code.
4. GR No. 160408 January 11, 2016
SPOUSES ROBERTO and ADELAIDA PEN, Petitioners,
vs.
SPOUSES SANTOS and LINDA JULIAN, Respondents.
FACTS: The appellees (the Julians) obtained loans from appellant Adelaida Pen. When
the loans became due, appellees failed to pay. As such, appellant Adelaida decided to
institute foreclosure proceedings, but instead was convinced that she just purchase the
property without proceedings. After the sale, Linda Julian offered to repurchase the
property but was denied by Adelaida. Further, she was informed by the Registry of
Deeds that the title to the mortgaged property had already been registered in the name
of Adelaida, prompting the former to file complaints.
The complaint alleged that appellant Adelaida, through obvious bad faith, maliciously
caused to be notarized the Deed of Sale earlier signed by appellee Julian, and used this
spurious deed of sale as the vehicle for her fraudulent transfer unto herself the parcel of
land. CA and the RTC both declared the deed of sale as void and inexistent.
ISSUE: Whether or not the CA erred in ruling that the deed of sale is void
RULING: No. The deed of sale between the parties as pactum commissorium. There is a
pledge or mortgage wherein property is pledged or mortgaged by way of security for
the payment of the principal obligation; and a stipulation for an automatic appropriation
by the creditor of the thing pledged or mortgaged in the event of non-payment of the
principal obligation within the stipulated period. The first element was present
considering that the property of the respondents was mortgaged by Linda in favor of
Adelaida as security for the farmer's indebtedness. As to the second, the authorization
for Adelaida to appropriate the property subject of the mortgage upon Linda's default
was implied from Linda's having signed the blank deed of sale simultaneously with her
signing of the real estate mortgage.
Also, the absence of the consideration from Linda's copy of the deed of sale was
credible proof of the lack of an essential requisite for the sale. In other words, the
meeting of the minds of the parties so vital in the perfection of the contract of sale did
not transpire.
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5. G.R. No. 167615 January 11, 2016
SPOUSES ALEXANDER AND JULIE LAM, Doing Business Under the Name and Style
"COLORKWIK LABORATORIES" AND "COLORKWIK PHOTO SUPPLY"
vs.
KODAK PHILIPPINES, LTD.
FACTS: Spouses Alexander and Julie Lam (Lam Spouses) and Kodak Philippines, Ltd.
(Kodak) entered into an agreement for the sale of 3 units of the Kodak Minilab System
22XL in the amount of ₱1,796,000.00 per unit. On January 15, 1992, Kodak delivered 1
unit of the Minilab Equipment in Tagum, Davao Province. The Lam Spouses issued
postdated checks amounting to ₱35,000.00 each for 12 months as payment for the first
delivered unit, with the first check due on March 31, 1992.
The Lam Spouses requested for Kodak not to negotiate the check dated March 31, 1992
allegedly due to insufficiency of funds. The same request was made for the check due on
April 30, 1992. However, both checks were negotiated by Kodak and were honored by
the depository bank. The 10 other checks were subsequently dishonored after the Lam
Spouses ordered the depository bank to stop payment.
Kodak cancelled the sale and demanded that the Lam Spouses return the unit it
delivered together with its accessories. The Lam Spouses ignored the demand and
rescinded the contract on account of Kodak’s failure to deliver the 2 remaining Minilab
Equipment units. Kodak filed a Complaint for replevin and/or recovery of sum of
money.
The trial court issued a ddecision in favor of Kodak ordering the seizure of the Minilab
Equipment, which included the lone delivered unit, its standard accessories, and a
separate generator set. Based on such decision, Kodak was able to obtain a writ of
seizure for the Minilab Equipment installed at the Lam Spouses’ outlet in Tagum, Davao
Province.
The Lam Spouses filed before the CA a Petition to Set Aside the Orders issued by the
trial court. These Orders were subsequently set aside by the CA and the case was
remanded to the trial court for pre-trial. The RTC found that Kodak defaulted in the
performance of its obligation. It held that Kodak’s failure to deliver 2 out of the 3 units
of the Minilab Equipment caused the Lam Spouses to stop paying for the rest of the
installments.
The CA modified the decision of the RTC by reducing the amount of damages awarded
to the Lam Spouses. A Petition for Review on Certiorari was filed by the Lam Spouses
contending that Kodak’s breach of their contract of sale entitles them to damages more
than the amount awarded by the Court of Appeals.
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ISSUES:
1. Whether the contract pertained to obligations that are severable, divisible, and
susceptible of partial performance?
No, the contract is not severable, divisible and susceptible to partial performance.
In Nazareno v. Court of Appeals, An obligation is indivisible when it cannot be validly
performed in parts, whatever may be the nature of the thing which is the object thereof.
The indivisibility refers to the prestation and not to the object thereof. There is no
indication in the Letter Agreement that the units ordered were covered by 3 separate
transactions. The factors considered by the CA are mere incidents of the execution of
the obligation, which is to deliver 3 units of the Minilab Equipment on the part of
respondent and payment for all three on the part of petitioners. The intention to create
an indivisible contract is apparent from the benefits that the Letter Agreement afforded
to both parties. Petitioners were given the 19% discount on account of a multiple order,
with the discount being equally applicable to all units that they sought to acquire. The
provision on "no downpayment" was also applicable to all units. Respondent, in turn,
was entitled to payment of all three Minilab Equipment units, payable by installments.
2. Whether the CA correctly ordered for restitution?
Yes, the CA correctly ordered for restitution. The contract between the parties is one of
sale, where one party obligates himself or herself to transfer the ownership and deliver
a determinate thing, while the other pays a certain price in money or its equivalent. A
contract of sale is perfected upon the meeting of minds as to the object and the price,
and the parties may reciprocally demand the performance of their respective
obligations from that point on.
When rescission is sought under Article 1191 of the Civil Code, it need not be judicially
invoked because the power to resolve is implied in reciprocal obligations. When a party
fails to comply with his or her obligation, the other party’s right to resolve the contract
is triggered. The resolution immediately produces legal effects if the nonperforming
party does not question the resolution. Court intervention only becomes necessary
when the party who allegedly failed to comply with his or her obligation disputes the
resolution of the contract. Since both parties in this case have exercised their right to
resolve under Article 1191, there is no need for a judicial decree before the resolution
produces effects. Further, respondent cannot claim that the 2 monthly installments
should be offset against the amount awarded by the CA to petitioners because the
effect of rescission under Article 1191 is to bring the parties back to their original
positions before contract was entered.
3. Whether the award for damages was proper?
Yes, the award for damages war proper. The issue of damages is a factual one. A
petition for review on certiorari under Rule 45 shall only pertain to questions of law. It is
not the duty of the Supreme Court to reevaluate the evidence adduced before the lower
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courts. Unless the petition clearly shows that there is grave abuse of discretion, the
findings of fact of the trial court as affirmed by the CA are conclusive.
The award for moral and exemplary damages also appears to be sufficient. Moral
damages are granted to alleviate the moral suffering by a party due to an act of another.
It is not intended to enrich the victim at the defendant’s expense. It is not meant to
punish the culpable party and, therefore, must always be reasonable vis-à-vis the injury
caused. Exemplary damages, on the other hand, are awarded when the injurious act is
attended by bad faith. In this case, respondent was found to have misrepresented its
right over the generator set that was seized. As such, it is properly liable for exemplary
damages as an example to the public.
4. Whether it is proper to award attorney’s fees.
Yes, the award of attorney’s fees is proper. Since the award of exemplary damages is
proper in this case, attorney’s fees and cost of the suit may also be recovered as
provided under Article 2208 of the Civil Code.
6. G.R. No. 201264 January 11, 2016
FLORANTE VITUG, Petitioner,
vs.
EVANGELINE A. ABUDA, Respondent
FACTS: Abuda loaned P250,000.00 to Vitug and his wife, Narcisa Vitug. As security for
the loan, Vitug mortgaged to Abuda his property in Tondo Foreshore. The property was
then subject of a conditional Contract to Sell between the National Housing Authority
and Vitug.
The parties then executed a "restructured" mortgage contract on the property to secure
the amount of P600,000.00 representing the original P250,000.00 loan, additional
loans, and subsequent credit accommodations given by Abuda to Vitug with an interest
of five (5) percent per month. By then, the property was covered by Transfer Certificate
of Title No. 234246 under Vitug's name.
Spouses Vitug failed to pay their loans despite Abuda's demands. Abuda filed a
Complaint for Foreclosure of Property before the Regional Trial Court of Manila. The
Regional Trial Court promulgated a Decision in favor of Abuda. Vitug appealed the
December 19, 2008 Regional Trial Court Decision before the Court of Appeals. He
contended that the real estate mortgage contract he and Abuda entered into was void
on the grounds of fraud and lack of consent under Articles 1318, 1319, and 1332 of the
Civil Code. He alleged that he was only tricked into signing the mortgage contract,
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whose terms he did not really understand. Hence, his consent to the mortgage contract
was vitiated. The Court of Appeals found that all the elements of a valid mortgage
contract were present in the parties' mortgage contract. Hence, this petition, where
Vitug contends that a mortgagor must have free disposal of the mortgaged property and
that the restriction clause in their contract has rendered the same void.
ISSUE: Whether the mortgage contract is valid.
RULING: Yes. For a mortgage contract to be valid, the absolute owner of a property
must have free disposal of the property. Contracts entered into in violation of
restrictions on a property owner’s rights do not always have the effect of making them
void ab initio.
Contracts that only subject a property owner’s property rights to conditions or
limitations but otherwise contain all the elements of a valid contract are merely
voidable by the person in whose favor the conditions or limitations are made.
The Principle of In Pari Delicto is an equitable principle that bars parties from enforcing
their illegal acts, assailing the validity of their acts, or using its invalidity as a defense.
Article 155 of the Family Code explicitly provides that debts secured by mortgages are
exempted from the rule against execution, forced sale, or attachment of family home.
Parties are free to stipulate interest rates in their loan contracts in view of the
suspension of the implementation of the Usury Law ceiling on interest effective January
1, 1983. Iniquitous or unconscionable interest rates are illegal and, therefore, void for
being against public morals. Even if the parties voluntarily agree to an interest rate,
courts are given the discretionary power to equitably reduce it if it is later found to be
iniquitous or unconscionable.
7. G.R. No. 167519 January 14, 2015
THE WELLEX GROUP, INC., Petitioner,
vs.
U-LAND AIRLINES, CO., LTD., Respondent.
FACTS: Wellex and U-Land entered into a Memorandum of Agreement to expand their
respective airline operations in Asia. They agreed to develop a long-term business
relationship through the creation of joint interest in airline operations and property
development projects in the Philippines. This agreement stated that within 40 days from
its execution date, Wellex and U-Land would execute a share purchase agreement
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covering U-Land’s acquisition of the shares of stock of both APIC (APIC shares) and PEC
(PEC shares).
The 40-day period lapsed but they were not able to enter into any share purchase
agreement although drafts were exchanged between the two. Despite the absence of a
share purchase agreement, U-Land remitted to Wellex a total of US$7,499,945.00.
Wellex acknowledged the receipt of these remittances in a confirmation letter.
According to Wellex, the parties agreed to enter into a security arrangement. If the sale
of the shares of stock failed to push through, the partial payments or remittances U-
Land made were to be secured by the shares of stock and parcels of land of Wellex.
Despite these transactions, Wellex and U-Land still failed to enter into the share
purchase agreement and the joint development agreement. As such, U-Land demanded
the return of the amount it had remitted to Wellex for failure to enter into a Share
Purchase Agreement. It had also offered to return all the stock certificates covering APIC
shares and PEC shares as well as the titles to real property given by Wellex as security
for the amount remitted by U-Land.
Wellex, however, refused to surrender the same stating that the agreements were
virtually finalized and that the inability of the parties to execute the share purchase
agreement and the joint development agreement principally arose from problems at U-
Land’s side, and not due to Wellex’s ‘unjustified refusal to enter into the share purchase
agreement. As such, U-Land filed a Complaint praying for rescission of the First
Memorandum of Agreement and damages against Wellex and for the issuance of a Writ
of Preliminary Attachment.
ISSUE: Was there an obligation created upon the happening of a condition?
RULING: None. Article 1185 of the Civil Code provides that:
ART. 1185. The condition that some event will not happen at a determinate time shall
render the obligation effective from the moment the time indicated has elapsed, or if it
has become evident that the event cannot occur.
If no time has been fixed, the condition shall be deemed fulfilled at such time as may
have probably been contemplated, bearing in mind the nature of the obligation. Article
1185 provides that if an obligation is conditioned on the nonoccurrence of a particular
event at a determinate time, that obligation arises (a) at the lapse of the indicated time,
or(b) if it has become evident that the event cannot occur.
Petitioner Wellex and respondent U-Land bound themselves to negotiate with each
other within a 40-day period to enter into a share purchase agreement. If no share
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purchase agreement was entered into, both parties would be freed from their
respective undertakings. It is the non-occurrence or non-execution of the share
purchase agreement that would give rise to the obligation to both parties to free each
other from their respective undertakings. This includes returning to each other all that
they received in pursuit of entering into the share purchase agreement.
At the lapse of the 40-day period, the parties failed to enter into a share purchase
agreement. This lapse is the first circumstance provided for in Article 1185 that gives
rise to the obligation. Applying Article 1185, the parties were then obligated to return to
each other all that they had received in order to be freed from their respective
undertakings. However, the parties continued their negotiations after the lapse of the
40-day period. They made subsequent transactions with the intention to enter into the
share purchase agreement. Despite that, they still failed to enter into a share purchase
agreement.
Communication between the parties ceased, and no further transactions took place. It
became evident that, once again, the parties would not enter into the share purchase
agreement. This is the second circumstance provided for in Article 1185. Thus, the
obligation to free each other from their respective undertakings remained. As such,
petitioner Wellex is obligated to return the remittances made by respondent U-Land, in
the same way that respondent U-Land is obligated to return the certificates of shares of
stock and the land titles to petitioner Wellex.
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8. G.R. No. 171127 March 11, 2015
NOEL CASUMPANG, RUBY SANGA-MIRANDA and SAN JUAN DEDIOS HOSPITAL,
Petitioners,
vs.
NELSON CORTEJO, Respondent.
FACTS: On April 22, 1988, at about 11:30 in the morning, Mrs. Cortejo brought her 11-
year old son, Edmer, to the Emergency Room of the San Juan de Dios Hospital (SJDH)
because of difficulty in breathing, chest pain, stomach pain, and fever. Thereafter, she
was referred and assigned to Dr. Casumpang, a pediatrician. At 5:30 in the afternoon of
the same day, Dr. Casumpang, upon examination using only a stethoscope, confirmed
the diagnosis of Bronchopneumonia. Mrs. Cortejo immediately advised Dr. Casumpang
that Edmer had a high fever, and had no colds or cough but Dr. Casumpang merely told
her that her son's bloodpressure is just being active and remarked that that's the usual
bronchopneumonia, no colds, no phlegm.
Dr. Casumpang next visited the following day. Mrs. Cortejo again called Dr. Casumpang's
attention and stated that Edmer had a fever, throat irritation, as well as chest and
stomach pain. Mrs. Cortejo also alerted Dr. Casumpang about the traces of blood in
Edmer's sputum. Despite these pieces of information, however, Dr. Casumpang simply
nodded and reassured Mrs. Cortejo that Edmer's illness is bronchopneumonia.
At around 11:30 in the morning of April 23, 1988, Edmer vomited phlegm with blood
streak prompting the Edmer's father to request for a doctor. Later, Miranda, one of the
resident physicians of SJDH, arrived. She claimed that although aware that Edmer had
vomited phlegm with blood streak she failed to examine the blood specimen. She then
advised the respondent to preserve the specimen for examination. Thereafter, Dr.
Miranda conducted a check-up on Edmer and found that Edmer had a low-grade fever
and rashes.
At 3:00 in the afternoon, Edmer once again vomited blood. Dr. Miranda then examined
Edmer's sputum with blood and noted that he was bleeding. Suspecting that he could be
afflicted with dengue, Dr. Miranda conducted a tourniquet test, which turned out to be
negative. Dr. Miranda then called up Dr. Casumpang at his clinic and told him about
Edmer's condition. Upon being informed, Dr. Casumpang ordered several procedures
done. Dr. Miranda advised Edmer's parents that the blood test results showed that
Edmer was suffering from Dengue Hemorrhagic Fever. Dr. Casumpang recommended
Edmer’s transfer to the ICU, but since the ICU was then full, the respondent, insisted on
transferring his son to Makati Medical Center.
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At 12:00 midnight, Edmer, accompanied by his parents and by Dr. Casumpang, was
transferred to Makati Medical Center. Upon examination, the attending physician
diagnosed Dengue Fever Stage IV that was already in its irreversible stage. Edmer died
at 4:00 in the morning of April 24, 1988. His Death Certificate indicated the cause of
death as Hypovolemic Shock/hemorrhagic shock/Dengue Hemorrhagic Fever Stage IV.
Believing that Edmer's death was caused by the negligent and erroneous diagnosis of his
doctors, the respondent instituted an action for damages against SJDH, and its attending
physicians: Dr. Casumpang and Dr. Miranda. Dr. Casumpang contends that he gave his
patient medical treatment and care to the best of his abilities, and within the proper
standard of care required from physicians under similar circumstances.
Dr. Miranda argued that the function of making the diagnosis and undertaking the
medical treatment devolved upon Dr. Casumpang, the doctor assigned to Edmer. Dr.
Miranda also alleged that she exercised prudence in performing her duties as a
physician, underscoring that it was her professional intervention that led to the correct
diagnosis of Dengue Hemorrhagic Fever.
SJDH, on the other hand, disclaims liability by asserting that Dr. Casumpang and Dr.
Miranda are mere independent contractors and consultants (not employees) of the
hospital; hence, Article 2180 of the Civil Code does not apply.
ISSUES:
a. Whether or not Casumpang had committed inexcusable lack of precaution in
diagnosing and in treating the patient
b. Whether or not Miranda had committed inexcusable lack of precaution in
diagnosing and in treating the patient
c. Whether or not Whether or not the petitioner hospital is solidarity liable with
the petitioner doctors
d. Whether or not there is a causal connection between the petitioners' negligent
act/omission and the patient's resulting death
RULINGS:
a. YES, Casumpang was negligent.
Even assuming that Edmer's symptoms completely coincided with the diagnosis of
bronchopneumonia, we still find Dr. Casumpang guilty of negligence. Wrong diagnosis is
not by itself medical malpractice. Physicians are generally not liable for damages
resulting from a bona fide error of judgment and from acting according to acceptable
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medical practice standards. Nonetheless, when the physician's erroneous diagnosis was
the result of negligent conduct, it becomes an evidence of medical malpractice.
In the present case, evidence on record established that in confirming the diagnosis of
bronchopneumonia, Dr. Casumpang selectively appreciated some and not all of the
symptoms presented, and failed to promptly conduct the appropriate tests to confirm
his findings. In sum, Dr. Casumpang failed to timely detect dengue fever, which failure,
especially when reasonable prudence would have shown that indications of dengue
were evident and/or foreseeable, constitutes negligence. Apart from failing to promptly
detect dengue fever, Dr. Casumpang also failed to promptly undertake the proper
medical management needed for this disease. Dr. Casumpang failed to measure up to
the acceptable medical standards in diagnosing and treating dengue fever.
Dr. Casumpang's claim that he exercised prudence and due diligence in handling
Edmer's case, sside from being self-serving, is not supported by competent evidence. He
failed, as a medical professional, to observe the most prudent medical procedure under
the circumstances in diagnosing and treating Edmer.
b. No, Dr. Miranda is not liable for negligence.
We find that Dr. Miranda was not independently negligent. Although she was subject to
the same standard of care applicable to attending physicians, as a resident physician,
she merely operates as a subordinate who usually refer to the attending physician on
the decision to be made and on the action to be taken. We also believe that a finding of
negligence should also depend on several competing factors. In this case, before Dr.
Miranda attended to Edmer, Dr. Casumpang had diagnosed Edmer with
bronchopneumonia. There is also evidence supporting Dr. Miranda's claim that she
extended diligent care to Edmer. In fact, when she suspected, during Edmer's second
episode of bleeding, that Edmer could be suffering from dengue, she wasted no time in
conducting the necessary tests, and promptly notified Dr. Casumpang about the
incident. Indubitably, her medical assistance led to the finding of dengue fever. Dr.
Miranda's error was merely an honest mistake of judgment; hence, she should not be
held liable for medical negligence.
c. Yes, causal connection between the petitioners' negligence and the patient's
resulting death was nhestablished
Casumpang failed to timely diagnose Edmer with dengue fever despite the presence of
its characteristic symptoms; and as a consequence of the delayed diagnosis, he also
failed to promptly manage Edmer's illness. Had he immediately conducted confirmatory
tests, and promptly administered the proper care and management needed for dengue
fever, the risk of complications or even death, could have been substantially reduced.
That Edmer later died of Dengue Hemorrhagic Fever Stage IV, a severe and fatal form of
dengue fever, established the causal link between Dr. Casumpang's negligence and the
injury. The element of causation is successfully proven.
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d. YES, SJDH is solidarily liable.
As a rule, hospitals are not liable for the negligence of its independent contractors.
However, it may be found liable if the physician or independent contractor acts as an
ostensible agent of the hospital. This exception is also known as the doctrine of
apparent authority.
SJDH impliedly held out and clothed Dr. Casumpang with apparent authority leading the
respondent to believe that he is an employee or agent of the hospital. Based on the
records, the respondent relied on SJDH rather than upon Dr. Casumpang, to care and
treat his son Edmer. His testimony during trial showed that he and his wife did not know
any doctors at SJDH; they also did not know that Dr. Casumpang was an independent
contractor. They brought their son to SJDH for diagnosis because of their family doctor's
referral. The referral did not specifically point to Dr. Casumpang or even to Dr. Miranda,
but to SJDH.
Mrs. Cortejo accepted Dr. Casumpang's services on the reasonable belief that such were
being provided by SJDH or its employees, agents, or servants. By referring Dr.
Casumpang to care and treat for Edmer, SJDH impliedly held out Dr. Casumpang as a
member of its medical staff. SJDH cannot now disclaim liability since there is no showing
that Mrs. Cortejo or the respondent knew, or should have known, that Dr. Casumpang is
only an independent contractor of the hospital. In this case, estoppel has already set in.
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